Download - BZ WBK-SANTANDER INVESTOR DAY
Gerry Byrne Bank Zachodni WBK
Bank Zachodni WBK, S.A. (“BZ WBK”) and Banco Santander, S.A. ("Santander") both caution that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors that BZ WBK and Santander have indicated in its past and future filings and reports, including in Santander’s case those with the Securities and Exchange Commission of the United States of America (the “SEC”) could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.
Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; such knowledge, information and views may change at any time. Neither BZ WBK nor Santander undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by BZ WBK and Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, BZ WBK and Santander give no advice and make no recommendation to buy, sell or otherwise deal in shares in BZ WBK, Santander or in any other securities or investments whatsoever.
Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.
Note: Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast.
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Disclaimer
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Index
1 Business evolution
2 Business environment
3 Strategy
4 Outlook 2011 / 2013
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Index
1 Business evolution
2 Business environment
3 Strategy
4 Outlook 2011 / 2013
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Bank Zachodni WBK - Introduction
branches
nationwide
1,040 ATMs
5 Corporate Banking Centres*
12 Business Banking Centres**
3rd largest bank in Poland
630 including
100 agencies
* 3 Corporate Banking Centres and 2 CBC representative offices. ** 6 Busines Banking Centres and 6 BBC representative offices
Balance Sheet
30th June 2011 Profit & Loss
1st January to 30th June 2011
Revenues EUR 479 m
Costs EUR 229 m
PBT EUR 207 m
ROE 19.5%
Assets EUR 13,941 m
Loans EUR 8,703 m
Deposits EUR 10,227 m
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Business evolution
Sustainable growth in profitability
Strong NII
Increasing capital ratios
Strong liquidity and funding position
2008 2009 2010 1H 2011
305293
342
207216 223246
161PBT
PAT
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Profits
Growth of net profit year after year
RoE 19.5%
RoE 17.7%
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Net interest margin
Sharp recovery in NIM brought about by promptly reflecting liquidity/capital costs in credit pricing and by improving deposit margins
3.81%
3.08%
3.82% 3.85%
4.27% 4.27%
3.00%
2.50%
3.02%
2.70%
3.00%3.15%
4Q2008 2Q2009 4Q2009 2Q2010 4Q2010 2Q2011
BZ WBK NIM
Sector Average NIM
2008 2009 2010 1H 2011
10.7412.07
15.80 15.76
Total capital ratio
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Total capital ratio
Ongoing focus on internal capital generation
60% Dividend Payout from 2010 Profits
%
2009 2010 1H 2011
3,9154,199
3,835
6,425 6,329 6,392
Non retail
Retail
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Loans and deposits
2009 2010 1H 2011
6,2905,721
6,076
2,667 2,869 3,016Non retail
Retail
Appreciable rebalancing of Loan Portfolio achieved
Customer deposits optimally managed to meet P&L and funding targets
€m
Retail loan growth
Reduction in Property
exposure
Above market growth
in all segments
Reduction in low
margin non-retail
deposits
85% L/D Ratio
Growth at market level
€m
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1 Business evolution
2 Business environment
3 Strategy
4 Outlook 2011 / 2013
Index
Polish market
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Economic indicators positive, expected slowdown in 2012 to ca. 3% driven by global
environment, with inflation under control and flat official rates in following quarters
Comfortable levels of solvency and liquidity / Stable asset quality situation
High double digit ROE
5.1
1.6
3.8 3.8 3.0 3.4
-6.6
-4.0 -4.5 -4.8 -5.1 -5.2
4.2
3.5
2.6 4.0
2.8 2.5
2008 2009 2010 2011 2012 2013
GDP growth (%YoY)
Current account balance (% GDP)
CPI inflation (%YoY)
47.150.9
55.0 55.9 56.4 56.5
50.351.9
53.655.5 55.3 55.2
2008 2009 2010 2011 2012 2013
Public debt / GDP (%)
Loans / GDP (%)
Source: IMF, NBP
Macro situation / Financial System
Bank 1 BZ WBK Bank 3 Bank 4 Bank 5 Bank 6 Bank 7
Tier I ratio
Polish market – stress tests results
Source: Bank interim reports
Minimum level 5%
Polish Banks Tier 1 in tests of extreme conditions (shock scenario as at the end
of 2012).
Average capital ratio for Polish banking sector at 13.9% at end June 2011
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BZWBK 13.8%
Polish Financial Supervision Authority (KNF) tests:
BZWBK and peer group
ROE (%) – 1st position
Source: Bank interim reports
40.647.9 49.1 50.4
55.9 59.3 60.2 62.71H2010 1H 2011
C/I (%) – 2nd position
Net Interest Margin (%) – 2nd position PAT – 3rd position
4.5 4.3 4.13.7
2.7 2.82.5 2.5
1H2010 1H 2011
19.5 18.617.1 16.1 15.0
11.5 11.2
16.5
1H 2010 1H 2011
463
343
162 137 11384
56 55
1H2010 1H 2011
FINANCIAL SECTOR (1)
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BZWBK and peer group
Source: Bank interim reports
6977
85 8498
106 105
1291H2010 1H 2011
18.38 17.8216.08 15.76
13.81 12.70 12.58 12.61
1H 2011 1H 2010
FINANCIAL SECTOR (2)
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L/D Ratio (%)
Solvency Ratio (%)
BZWBK and peer group
NPL Ratio (%)
Source: Bank interim reports
55.0
39.044.1
50.2
2.9
5.56.8 6.9
4.4
6.3
9.08.5
BZ WBK
Peer Average
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NPL % below peer average
NPLs have peaked with book adequately provisioned
Local tax reasons make NPL reduction challenging
FINANCIAL SECTOR (3)
Coverage Ratio (%)
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1 Business evolution
2 Business environment
3 Strategy
4 Outlook 2011 / 2013
Index
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Strategy 2011- 2013 Bank Zachodni WBK intends to strengthen its market position as a universal
institution, offering a full range of financial services in the retail, business and
investment banking sectors.
The Group’s aspiration is:
8% share in the
banking market
Top 3 position in
PBT, cost/income,
solvency ratio and
customer service.
Profitability
Adequate level of capital
and liquidity
Efficiency
Customer satisfaction
STABILITY AND GROWTH OF RECURRENT REVENUES
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4
3
5
Revenue diversification 2
Actions
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Retail Increase product penetration
Leverage Santander Global Skills
SME Gain market share in chosen sectors
Extend Business Banking regional coverage
Corporate Leverage Santander international network
Extend the product range
&
1
2
Actions
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Efficiency Leverage Santander Best practices
Reduce Cost/Income ratio
Capital and Liquidity
Loan/Deposit and Total Capital Ratios at surplus levels
Attractive Dividend Policy
Customer Service
Maintain podium position
Continue to build service standards
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4
5
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1 Business evolution
2 Business environment
3 Strategy
4 Outlook 2011 / 2013
Index
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Outlook 2013
Revenue Diversification
Adequate capital + liquidity
Asset Quality
Low double digit Revenue growth Significant Revenue streams from both Net Interest Income and Other Income
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5
3
Efficiency 2
Cost / Income ratio in the range of 41% to 43% Mid single digit cost growth
Ca. 20% Annual Profit Growth
Maintain Strong Capital and Loan/Deposit Ratios
Below market level Cost of Risk
Profitability 4
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Summary conclusions
BZ WBK is well positioned and has all the necessary ingredients to deliver strong growth:
High growth economy
Investment in distribution over the past 5 years
Comfortable liquidity and capital position
Strong management team
….And ability to take advantage of a large international group.
BZ WBK aims to deliver PAT of Euro 480 m in 2013(*)
(*) Considering 100% BZ WBK Asset Management
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